261 Responses

I knew Malcolm Beattie from my school surf days at Port Waikato. The article is right. he got things done. he called a spade an effing shovel and he moved things to make things happen. There was no denying that he was passionate about rescue that is for sure.

But the crux of the whole shinnannigans was how on earth have we allowed organisations such as the rescue helicopter service(s) around the country to have to beg for funds to keep going?

I agree that these services should be available throughout the country and yes, there have been operators who have pushed the boundaries to get themselves into the ACC handout. But a national servicee (aka Fire Service) would a useful addition to the country surely.

The issue of the cut from the charity funds for "non-charity" purposes needs clarifying and more and more we are seeing the creaming of funds.

The nasty bit is, would charities even get the amount they actually get to spend "in the right place" without the marketing? THAT is the balancing question and I suspect that the marketers themselves probably do the convincing on that one.

qualms about contributing to a charity that was doing what should properly be done by the state in a civilised country

If people are voluntarily helping each other out, why should the government stop them, by forcing people to help each other out instead?

There might be arguments to be had about the relative quality of government and voluntary welfare. And I'm not arguing that the government should suddenly abolish the welfare system, expecting the voluntary sector to magically instantly take up the slack. But, all other things being equal, I prefer to voluntarily help people out, instead of getting the government to force everyone else to help them out.

I can't help but wonder...the Big Night In can't have been cheap to execute...wouldn't it have made more cents (see what I did there?) to just donate the money they spent running the thing instead of passing off a 23 hour ad as fundraising?

But a national servicee (aka Fire Service) would a useful addition to the country surely.

It's hard enough to deal with the medical emergency calls they have now without making NZFS the ambulance provider to the nation. Remember that about 85% of fire fighters in NZ are volunteers, in the traditional sense of the word, ie: they get paid not a skerrick for their efforts and they subsequently must interrupt paid employment to respond to call-outs. Medical co-response is stretching the good-will of a lot of employers to the very limits, and at some point things will snap.

If the Fire Service were to be made the national ambulance provider, there would have to be very clear lines drawn around medical vs fire/rescue. The criteria for having paid medical response staff would have to be vastly different to the criteria for having paid fire/rescue staff - it costs roughly a million dollars a year to keep up a single-appliance station with 24x7 career manning, and consequently very few communities can justify them. Even a "Yellow Watch" working 0700-1700 Monday-Friday comes in at over a quarter-mil. It sounds really easy to make NZFS the ambulance provider for all emergency medical services, but the models overseas all predicate on fully career fire services or fully volunteer. They don't have a mix because the NZ model of a fully national service is unique. That means we'd have to figure it out for ourselves, and when there're lives at stake that's a big risk.

If people are voluntarily helping each other out, why should the government stop them, by forcing people to help each other out instead?

I don't personally object to the role of charities, at all. I'm involved in a charitable event later this month myself. But surely you can see that there's a problem here with where the money actually goes?

What is an acceptable ratio then? It seems a bit rough to make claim that their's is "wrong" without defining what is realistically possible.

18% looks low, but maybe that spending on PR, marketing, and events gives you enough awareness that the total amount in the end is much higher - it wouldn't be easy to raise $350k without any level of awareness for example?

Certainly agree with the suggestion to make those things visible though, so we can begin to judge what is realistic.

18% looks low, but maybe that spending on PR, marketing, and events gives you enough awareness that the total amount in the end is much higher - it wouldn't be easy to raise $350k without any level of awareness for example?

I wonder if that's the problem. If your operating expenses are 80% of revenue, and such a large chunk of that goes in marketing, advertising and PR aimed at bringing in the revenue in in the first place ... isn't the model broken?

This post is very timely. The Press has an editorial today on Pokie Trusts and calls for reform. There has been an ongoing issue these past two weeks with Eureka Trust. The Problem Gambling Foundation (PGF) threatened to take Eureka to the high court over their donations to horse racing stakes (in breach of their Trust Deed - which they were informed about 18 months ago).

Horse racing is an authorised purpose in the Gambling Act, but Eureka set themselves up as a Charitable Trust in 2003 meaning they can't donate to horse racing. They have been donating around $1 million each year of the $5 million they distribute.

Then later in the week Eureka announced they would stop all donations to sport (even though the legal opinion is that grassroots sport is a charitable purpose). Sporting organisations are rightfully upset that Eureka has changed their position of a week ago when they said they would stop donations to horse racing but continue to fund sport.

Pokie Trusts also cream off a lot of money in admin (around $150 million for the Trust administration and $150 million for the pubs). Seems like a lot to distribute around $300 million.

And as you have mentioned in your piece, there is too much potential for crime and corruption in how pokie trusts operate.

Pokie Trusts are not fair, not efficient, and not transparent. It's time for Central Government to review whether a more streamlined and transparent system is needed.

It is a shonky business. I now make a point of asking, when I get yet another call raising money for a charity, "So, how much of my donation will go directly to the charity?". The explanation I recently heard was that the 'overheads' are high for these fund-raising companies. That is absolute tosh--to hire a bunch of poorly paid, under-trained teenagers to ring you up in the middle of your tea?

What is an acceptable ratio then? It seems a bit rough to make claim that their's is "wrong" without defining what is realistically possible.

That's shockingly low.

As a comparison, Pub Charity last year returned about 40% of its income back to the community. But about another 25% went to problem gambling, and other 22% on rentals to get the gambling machines in the site in the first place. Administration was 5% of their income.

They no doubt get some benefits from economy of scale, but returning less than 25% to the actual purpose of the donation is terrible.

In the discussion here, some readers expressed qualms about contributing to a charity that was doing what should properly be done by the state in a civilised country.

In a "civilised country", I personally think it would be damn nice if no school ever had to fund raise for anything, Women's Refuge could suspend next year's appeal because it wasn't necessary, and the hospice/palliative care sector was fully (and generously) funded by the government. But, to be fair, I have a funny feeling you could line up a string of past and present health, education and welfare ministers who would tell you that they couldn't secure enough funding for every worthwhile causes.

If I were to price a job, of almost any kind, as 25% wages 25% expenses/materials and 50% profit I would consider it "Skimming" So, surely an 80/20 split is not outrageous considering the "product" is just the feel good factor of giving?.If I wanted to give $50 to a starving family in Africa and guarantee the family got 100% of my donation, I would have to fly there and give it to them in person. The airfare alone would cost...Just a thought.

I wonder if that's the problem. If your operating expenses are 80% of revenue, and such a large chunk of that goes in marketing, advertising and PR aimed at bringing in the revenue in in the first place ... isn't the model broken?

But the spend is to GET the revenue in this case - not the other way around.

As has been pointed out now, the return they're getting does seem comparatively low to other charities so perhaps they are overdoing the PR spend. To continue the Devil's Advocate though, to get the higher absolute amounts, you may have to accept a lower final flow through.

I'll put it this way - if they hadn't spent $400k on ads/PR/events, would they still have raised $1.95m? I'd say almost certainly no. The question is how much lower - what's the marginal dollar spent on advertising getting you back in revenue.

Perhaps another measure would be the volunteer hours v paid hours. I've been involved in one particular organisation for many years and most of the organisation is made up of volunteers who act as committee members, board members, help with activities etc. For many volunteers these can become significant commitments.

However, to be more effective - to organise activities, answer phones, provide that front line help etc - you really need paid staff. Most employees of charities are on minimum wages or not much more as these salaries have to be fundraised for, as well as the office space etc. So many organisations are employing professional fundraisers as a necessity in the crowded market.

But to get the shrinking charity money you need to promote your organisation (your brand). Kids Can spent a lot on marketing but it was very successful to the extent of getting a dedicated Telethon and nationwide name recognition. So in marketing terms it can be seen as a real success.

I would love to go back to a grants system whereby the government worked in partnership with trusted organisations to provide services. (The last govt's Pathways to Partnership program which gave funding to organisations to work together was the start of this - but the new Govt has cut it).

But until we do charities have to work in the competitive capitalist system.

Perhaps the Govt's best play would be providing a centralised, free source to market charities. www.charities.nz or similar with a big billboard, TV etc campaign behind it.Then let people come to a central source and choose which charity they want to give to - solves the mass duplication of competitive media spend.

Combine that with the ratio info from the Charities Commission and you have an incentive for charities to minimise their ad spend and use the central resource to still get the message out.

Has anybody identified any need for the raincoats and shoes that KidsCan provides? It looks to me like another opportunity for Adidas (which supplies the branded coats) to obtain yet more free publicity.

There is a big difference between charities like Oxfam which are committed to addressing broad issues of poverty and those like KidsCan which have rather limited and (in my less-than-humble opinion) rather simplistic aims: give them coats and shoes and self-respect. Poverty is a big difficult issue, which will not be solved by sentiment and sponsorship.

But to get the shrinking charity money you need to promote your organisation (your brand).

And to continue the rather icky-PR speak, some charities have well-established brands and a high degree of public recognition. Am I the only person who hadn't heard of Kids Can until a week ago, and tend to stick to donating to organisations like the Cancer Society, Plunket, Women's Refuge etc. that were knocking around long before I had more than two copper pennies to rub together?

Has anybody identified any need for the raincoats and shoes that KidsCan provides? It looks to me like another opportunity for Adidas (which supplies the branded coats) to obtain yet more free publicity.

Yes, and the No.1 Shoe Warehouse seems to supply the shoes, for its own promotional return. It can seem that the chief purpose of KidsCan is less to supply needed goods than to supply promotional opportunities.

There is a big difference between charities like Oxfam which are committed to addressing broad issues of poverty and those like KidsCan which have rather limited and (in my less-than-humble opinion) rather simplistic aims: give them coats and shoes and self-respect. Poverty is a big difficult issue, which will not be solved by sentiment and sponsorship.

Certainly not, but OTOH I suspect there's also a certain discomfort zone people can feel about donating to charities that, in large part, act as lobbyists rather than directly providing goods and/or services. And before anyone jumps on my head, I'm perfectly well-aware that that line can be pretty hard to draw with any confidence. Personally, I can find the Women's Refuge pretty hard to take ideologically but WTF... if they're practically helping to get women and children the hell out of unsafe situations, that's a perfectly acceptable quid pro quo.